What’s the future of loyalty cards? Here are some suggestions

Is your wallet so full because you have 101 loyalty cards spilling out? And when the time actually comes to use that card, it's the one card missing?

For some, including me, loyalty cards have become more of a burden than a privilege. However physical loyalty cards are on their way out. Many retailers store customer data, so customers can simply quote their name and phone number and the business will find that customer and apply any points or rewards that way.

I think the future of loyalty cards will actually be mobile. Loyalty cards will be stored in a smart phone's wallet and the customer simply scans up against a barcode to register their purchase and reap the loyalty benefits. Three Bean cafes have already jumped on the bandwagon. Customers can scan a barcode when purchasing their coffee every morning instead of getting out a physical card.

What are your thoughts on the future of loyalty cards? Are you loyal to the physical card or do you think the future is mobile?

Comments

I agree that there is wallet proliferation around loyalty cards but wonder if the solution lies not in another method (although that is still relevant if it is what the cusotomer wants), but more in ensuring that your loyalty programme is valued by the customer and therefore one of the 10 that is valued sufficiently to gain wallet space! Maybe the answer is not either/or but both… I believe the secrete to a sucessful loyalty programme is not so much the programme, but the value your total brand – service/range/pricing etc delivers. Maybe better to invest in getting this right first.

Great article! In a world where 15% of a retailer’s customer base drives 50% or more of their profits, loyalty programs are essential. Even more so when consumers are “showrooming” and scanning bar codes in brick and mortar locations to buy the product from another online retailer, like Amazon.

At Punchcard (www.punchcard.com), we’ve created a mobile punchcard solution for over 15M retailers, where consumers can earn rewards – like store credit or cash back – on their every day purchases like grocery, haircuts, restaurants, and more. We are changing the world of loyalty programs so local businesses can still offer punchcards, but now they can have metrics and insights into who their customers are, along with the ability to send offers to their customers.

The net result is that consumers get rewarded for being the awesome loyal customer that they are, and save money at their favorite places.

Merchants, on the other hand, get to know who their customers are, and maintain a 1:1 dialogue with them, and create incentives for their consumers to come back again and again. With Punchcard, they are able to lift their profits and increase their cash flow. Their success is measurable, has less fraud than standard punchcard programs, and maintains an ongoing relationship with their customers.

No more carrying a bunch of punchcards in your wallet – they’re all in your phone now!

I totally agree. Loyalty is definitely going mobile, especially with the help of location services. Foursquare specials is just one example. There’s an international shopping loyalty network called Lyoness, and they already have a mobile app that can tell users if there are any participating outlets nearby, and then using the app they can display their unique barcode to earn points.

@andy – thanks for your input – so what has been the feedback from your customers regarding cards vs mobile – are they ready to ditch plastic? Is there a danger the mobile solution could become a burden too? What about retailers where traditional plastic card loyalty scemes are doing well – how do they feel about changing the way they do things?

The current mission for businesses in wanting to go “mobile” in their loyalty strategy is the technology to implement it is there and ready, it’s about consumers catching up with the technology and actually using it. There is already so much NFC capability, it’s just people don’t know about it. I think in time consumers will catch up but it is up to the businesses to start pushing it and demonstrating how to use it. I don’t see how retailers can loose as flashing a card or a phone will still give them valuable data and entitle consumers to the same benefits.

The mobile space for loyalty is far too cluttered and will continue to become more congested, creating too much choice and resulting in confusion for the consumer and retailer alike.
Add to this the fact that “smart phone” sales are outstripped by “regular phones” 3:1 and NFC is lucky to push into double digit volumes.
Tracking-engagement-geolocation-social media and one-on-one can all be done without the need for the “smart phone” using the ultra-low cost card approach.
This marketplace has so much white noise that it’s becoming deafening
KISS….. Keep It Simple Stupid!!